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1. The three major U.S. stock indexes closed mixed. The Dow Jones Industrial Average fell 0.23% to 50,461.68 points, the S&P 500 rose 0.61% to 7,519.12 points, and the Nasdaq Composite rose 1.19% to 26,656.18 points. Chevron fell more than 3%, and UnitedHealth Group fell nearly 3%, leading the decline in the Dow. The chip and memory sector led the gains, with Micron Technology surging more than 19%, its total market capitalization surpassing $1 trillion for the first time. UBS significantly raised its target price for Micron from $535 to $1,625. SanDisk rose more than 7%, Western Digital rose more than 8%, and Seagate Technology rose 4%. The Wind U.S. Tech Big Seven Index rose 0.22%, with Tesla and Google rising more than 1.5%. 2. European stock indices closed mixed. The German DAX index fell 0.8% to 25,184.89 points, the French CAC40 index fell 1.03% to 8,173.11 points, and the UK FTSE 100 index rose 0.24% to 10,491.39 points. 3. US Treasury yields fell across the board. The 2-year Treasury yield fell 7.91 basis points to 4.034%, the 3-year Treasury yield fell 7.66 basis points to 4.083%, the 5-year Treasury yield fell 6.79 basis points to 4.172%, the 10-year Treasury yield fell 5.74 basis points to 4.485%, and the 30-year Treasury yield fell 3.57 basis points to 5.019%. 4. International precious metals futures generally closed lower. COMEX gold futures fell 1.45% to $4,507.30 per ounce, and COMEX silver futures fell 1.44% to $77.27 per ounce. 5. The WTI crude oil futures contract rose 3.62% to $93.57 per barrel; the Brent crude oil futures contract rose 3.06% to $96.28 per barrel. 6. Most London base metals rose. LME aluminum rose 0.69% to $3,674.5 per tonne, LME tin rose 0.61% to $54,505.0 per tonne, LME nickel rose 0.51% to $19,010.0 per tonne, LME lead rose 0.20% to $2,015.5 per tonne, LME copper fell 0.42% to $13,610.5 per tonne, and LME zinc fell 0.42% to $3,528.0 per tonne.On May 27th, regarding the US strike on southern Iran, Iranian citizens expressed that the USs words and actions are not trustworthy and doubted the possibility of a US-Iran agreement. One Iranian citizen stated, "The Iran nuclear deal is a prime example; the US reneged on everything. This attack is the same. The USs contradictory statements clearly show that none of their pronouncements are guaranteed. However, I dont think the war will continue because the US has paid a heavy price, and they are also afraid. We control the Strait of Hormuz, which, for the US, is probably worse than having a hundred nuclear bombs. We are very familiar with those US statements; they are unreliable, and we must be highly vigilant. People must be careful because we must consider the possibility of something similar to the US withdrawing from the Iran nuclear deal happening again; in other words, the US-Iran agreement might be torn up."Conflict Status: 1. Ukraine claims energy facilities were attacked, causing power outages in multiple locations. 2. Russian Security Service: Russia and Belarus jointly prevented Ukraine from transporting over 500 explosive devices to Russia. 3. According to Interfax news agency: The Russian Ministry of Defense stated that Russian troops have taken control of Zapsilya and Ryasny in eastern Ukraine. Peace Negotiations: 1. Russian Deputy Foreign Minister: There are currently no preconditions for strategic stability dialogue with the United States. 2. US Secretary of State Rubio: There are currently no ongoing or scheduled negotiations between the United States and Ukraine. Other Developments: 1. The United Kingdom announced a new round of sanctions against Russia. 2. Japan sent officials to Russia to "promote communication." 3. The European Council extended sanctions against relevant Russian individuals and entities. 4. Russia claims the United States did not issue visas to Russian officials to attend Security Council meetings. 5. The United Kingdom and Poland will sign a defense and security agreement to curb the Russian threat. 6. A court ruled that the European Clearing Bank must immediately compensate the Central Bank of Russia approximately €200 billion. 7. According to RIA Novosti: Russian Foreign Minister Lavrov explained the reasons that led Russia to decide to attack Kyiv during a phone call with US Secretary of State Rubio.On May 27, according to the Wall Street Journal, U.S. Trade Representative Greer said on Tuesday that President Trumps 10% global tariffs could be reinstated after their July expiration, noting that the relevant regulations do not explicitly state whether the president can reinstate these tariffs after the legal deadline. Trump imposed the 10% global tariffs in February under Section 122 of the Trade Act of 1974, which are set to last a maximum of 150 days and were originally scheduled to expire in July and be replaced by new tariffs. Speaking at an event hosted by the Council on Foreign Relations, Greer said that the law may allow for the reinstatement of these tariffs, as the regulations only specify the expiration date and not when they can be reinstated. Greer did not say whether the Trump administration would seek to extend these tariffs, but stated that he "cannot imagine" Congress intending to limit the presidents power to use Section 122 tariffs to once per term.① Iran 1. Iran stated it would retaliate fiercely if war resumed and would block regional oil exports. 2. Irans Supreme Leader stated the US would no longer have a "safe haven" in the Middle East. 3. The Iranian Revolutionary Guard declared that Iran has the right to respond to any US violation of the ceasefire agreement. It locked onto and shot down a US MQ-9 drone. 4. The Iranian Foreign Ministry stated that Iran would respond to the USs blatant violation of the ceasefire agreement. ② The US 1. Trump: Irans enriched uranium will be immediately transferred to the US for destruction; a better option is to destroy it on-site (or at another mutually acceptable location) with close cooperation and coordination with Iran, and the entire process and related matters must be witnessed by the Atomic Energy Commission (or its equivalent). 2. At a crucial moment in US-Iran negotiations, Trump spoke with Netanyahu. 3. US media reported that as peace talks with Iran approach a critical juncture, Trump will make a rare visit to Camp David on Wednesday to hold a cabinet meeting. 4. Trump: Given the potential for severe weather tomorrow, a cabinet meeting will be held at the White House, and the cabinet trip to Camp David will be postponed. ③ Israel 1. The Israeli military claims to have killed a key Hamas weapons production figure, Mohammed Abu Mahlou. 2. Israeli Prime Minister Netanyahu: Israel launched an attack in Gaza on the leader of a new Hamas armed branch. 3. The Israeli military issued an emergency mobilization order to expand its military operations outside the Yellow Line in Lebanon. 4. The Israeli military issued evacuation warnings to residents of two towns in the Bekaa region of Lebanon, anticipating possible airstrikes. 5. Israeli media reported on the 26th that the Israeli military crossed the ceasefire line into southern Lebanon to launch a ground offensive. 6. Israel strives to retain its freedom of action in Lebanon within the Iran agreement. 7. The Israeli military launched airstrikes on Hezbollah infrastructure in Lebanon, killing several militants. ④ Strait of Hormuz 1. The Wall Street Journal reported that US military officials revealed that the US Navy has resumed assisting ships transiting the Strait of Hormuz. 1. The report was later admitted to being incorrect: "Project Freedom" had not been restarted, and the US military was merely "quietly" assisting ships in transiting the Strait of Hormuz. 2. According to Irans Tasnim News Agency: The Iranian Islamic Revolutionary Guard Corps Navy stated that 25 oil tankers, container ships, and other commercial vessels had transited the Strait of Hormuz with Iranian permission in the past 24 hours. 3. The UKs Office for Maritime Trade Operations: An oil tanker (near Oman) reported an external explosion, located on its port stern, near the waterline. ⑤ Ceasefire Negotiations 1. The US Central Command stated it conducted a self-defense strike in southern Iran; US officials: This does not mean the ceasefire has ended. 2. Qatari Foreign Ministry: Reports of Qatar contributing $12 billion to facilitate the agreement are completely false. 3. US Secretary of State Rubio: The Strait of Hormuz must remain open; negotiations on the wording of the Iran agreement may "take several days." 4. Iranian media denied claims that Iran and the US had reached a memorandum of understanding. 5. According to Irans Tasnim News Agency: Sources close to the negotiating team stated that if a potential memorandum of understanding is reached with the United States, the $24 billion in frozen Iranian funds must be unfrozen. 6. Sources stated that the unfreezing of Iranian funds is the last major obstacle between Iran and the United States, and is being resolved through mediation in Qatar. This has not yet been officially confirmed. 7. Middle Eastern officials: Despite the attack on Iran, the diplomatic process will continue. 8. Iranian President: Ready to reach a "dignified" framework agreement. 9. According to Lebanese television station Al-Mayadeen: An advisor to Iranian Parliament Speaker Ghalibaf stated that if the United States "plays word games," Tehran will withdraw from negotiations.

Crypto winter may temper fintech earnings

Jimmy Khan

Aug 04, 2022 14:41

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Wall Street has lowered earnings expectations for once high-flying fintechs Coinbase and Block, as a chill in the cryptocurrency market adds more pain to the companies already grappling with surging costs and rapidly rising rates.


Crypto exchange Coinbase is expected to report an adjusted loss in the second quarter, while Jack Dorsey-led payments company Block is likely to post a 70% drop in adjusted profit.


Coinbase, which has the biggest exposure to crypto volatility, has lost more than three quarters of its market capitalization this year.


“For Coinbase, this is going to be a very difficult 12 to 18 months,” said Dan Dolev, senior analyst, fintech equity research at Mizuho Securities USA.


Block, which changed its name from Square last year to better reflect its focus on blockchain, has lost over half of its market value amid the stock market rout this year.

The context

The cryptocurrency selloff has dragged down multiple companies in the sector, with some even seeking bankruptcy protection. Bitcoin, the largest cryptocurrency, has nearly halved in value in the first seven months of the year.


“There could be potential for double digit headcount reduction (at Coinbase) at some point because the cost is too high,” Dolev said.


Estimate cuts and competitive pressures are also contributing to the weakness in fintech stocks, according to Credit Suisse analysts.


The cryptocurrency sector may be slowly emerging from a bruising selloff, but they still have to contend with regulatory hurdles in the United States, the biggest market for such assets.


Online trading app Robinhood Markets Inc reported a 44% plunge in second-quarter earnings on Tuesday, a day earlier than expected, and said it would also cut 23% of its workforce.